Labor Relations Update

Divided NLRB Rules Employer Policy Protecting Customer Information Is Lawful

Employers can prohibit the use by employees of the names, social security numbers and credit card numbers of customers in furtherance of organizational activities.  If this seems like it should have been a foregone conclusion, a recent case from the NLRB shows how the agency’s continued parsing of employer policies could easily have turned this notion on its head.

In Macy’s, Inc., 365 NLRB No. 116 (August 14, 2017) a number of the employer’s policies had been challenged as unlawful. Many of the policies were found to violate the Act.   The employer, an operator of department stores, chose to appeal only one aspect of its policies:  the Administrative Law Judge’s findings that the employer’s policies  prohibiting the use of customer information were unlawful.  The employer had three policies addressing use of customer information.

The first employer policy defined confidential information as follows:

What is confidential information?  It could be business or marketing plans, pricing strategies, financial performance before public disclosures, pending negotiations with business partners, information about employees, documents that show social security numbers or credit card numbers–in short any information, which if known outside the Company could harm the Company or its business partners customers or employees or allow someone to benefit from having this information before it is publicly known.

Just as our Company requires that its own confidential information be protected, our Company also requires that the confidential information and proprietary information of others be respected. . .

We are all trusted to maintain the confidentiality of such information and to ensure that the confidential information, whether verbal, written or electronic, is not disclosed except as specifically authorized.  Additionally, it must be used only for the legitimate business of the Company.

The Company also maintained a “USE OF PERSONAL DATA” policy:

The Company has certain personal data of its present and former associates, customers and vendors.  It respects the privacy of this data and is committed to handling this data responsibly and using it only as authorized for legitimate business purposes.

What is considered personal data?  It is information such as names, home and office contact information, social security numbers, driver’s license numbers, account numbers and other similar data.

The Use of Personal Data policy stated that employees must follow all “policies and measures adopted by the Company for the protection of such data from unauthorized use, disclosure or access.”

Finally, the Company maintained a “CONFIDENTIALITY AND ACCEPTABLE USE OF COMPANY SYSTEMS” policy:

Any information that is not generally available to the public that relates to the Company’s or the Company’s customers, employees, vendors, contractors, service providers, Systems etc., that you receive or which you are given access during your employment or while you are performing services for the Company is classified as ‘Confidential’ or ‘Internal Use Only.’

The employer’s Acceptable Use policy prohibited the sharing of such information with third parties.

The Charging Party union challenged these rules as unlawful, asserting that they would lead a “reasonable employee” to interpret them as prohibiting contact with customers during a labor dispute, something that is protected by the Act.  Complaint issued.

The Administrative Law Judge’s Decision

The Judge, after discussion of the policies in general, found the restrictions related to customers violated Section 8(a)(1), noting that the General Counsel “challenges the restrictions on the use of information regarding customers and vendors.  In certain situations, employees are permitted to use such information in furtherance of their protected concerted activities. . .”  There was little discussion of the actual language of the policies other than to note that it referenced “customer” information and that such information might include that used for purposes of protected activity.

Board Majority Sees It Differently

A two person majority (Chairman Miscimarra and Member McFerran) concluded the policies related to use of customer information were lawful.  The Board noted the policy identifying the information considered by the employer to be confidential “specifically defines” confidential information and the “only information covered by that rule that arguably relates to customers is ‘social security numbers or credit card numbers.'”  The Board noted that the General Counsel had conceded that employees do not have a right to use such information.  As to the Use of Personal Data an Acceptable Use of Company Systems restrictions, the Board held both rules “limit the use or disclosure of customer names and contact information”–information that could arguably be used in a labor dispute, but that “such rules “by their terms, only apply to customer names and contact information obtained from the [employer’s] own confidential records.”

The Board then cited the numerous cases holding that employees who use information taken from employer systems are outside the protection of the Act, including one where the employee had forwarded hundreds of company emails, some of which included confidential data, to a personal email account.

In a footnote, Chairman Miscimarra reiterated his call, set forth in prior cases as a dissent, that the test as to whether an employee would “reasonably construe” certain language to infringe on rights should be overruled and repudiated by the courts as unworkable.

Dissent Interprets Policies As Restrictive

Member Pearce dissented, stating employees “would reasonably interpret these broad rules as prohibiting or restricting their disclosure and use of customer information, for all purposes, including those that may implicate their terms and conditions of employment.”  The dissent argued what many employers asserted in defense of handbook policies,– that the majority was reading phrases of the policies “in isolation,” to come to its conclusion.  Specifically, the dissent noted that the definition of confidential information included “any information, which if known outside the Company could harm the Company….”  This phrase arguably isolates a few words while ignoring the more detailed definition preceding it.

Takeaways

This case is another example of how the standard of evaluating the lawfulness of language in a handbook can lead some very smart practitioners to come to widely disparate conclusions.  Here we have four seasoned labor professionals (an ALJ and three Board members) coming to different conclusions.  Indeed, the fact that the Chairman and Member McFerran were together in the majority is unusual enough (it’s probably happened on a case like this only a handful of times) to show that reasonable minds can and do differ as to the meaning of certain policies.  If these professionals cannot agree on what language constitutes a violation of the Act, then it certainly makes one wonder whether the “reasonable employee” who is envisioned in the standard would agree with any of the interpretations or hold a different view.    It seems likely the standard will be changed in the coming months as the make-up of the Board changes.

Until then, the drafting rules that have helped employers avoid problems of this sort remain in effect.  Tailor the policy to achieve the business objective.  In this case, the definition of confidential information was very specific, and narrow.  The types of information under the Use of Personal Data and Use of Company Systems policies were restricted, appropriately, to information that the employer collects as part of its business.

The case also offers an excellent recitation of all the instances where employee use of confidential information has been found to be unprotected.

NLRB Gains A New Member As Marvin E. Kaplan Is Sworn In

The NLRB announced today that Marvin E. Kaplan was sworn in as the agency’s newest Board member.  Member Kaplan’s term expires August 27, 2020.  The Board complement now stands at four of five members.  Congress delayed confirmation of the President’s other appointee, William Emanuel, until at least September.  Assuming Mr. Emanuel is confirmed when Congress returns the Board will have a full complement for the first time in several months.  Having five members may only last for approximately 90 days, however, as Chairman Miscimarra recently announced he would leave when his appointment expires in December 2017.  So we can expect another appointment to the Board sometime in the Fall.

There exists a great deal of interest on what is happening at the Board.  Changes to case law can only occur when a majority of the panel agrees and as of this moment there is the possibility of a 2-2 split over the many legal issues currently dividing the labor relations community.

NLRB’s Acted More Like “Advocate Than Adjudicator” In Issuing Decision, DC Court of Appeals Concludes

When bargaining over an agreement, it is common to hear union representatives ask “why do we need such elaborate language in an agreement?  We are always reasonable.”  To which, the company usually responds, “We think you’re nifty but the next person holding your job may not be as reasonable; better to have it in writing so there is no confusion.”  Clear contract language can solve a lot of issues but only if it is read and followed.  This is why it is sometimes perplexing and irksome that the NLRB will occasionally ignore clear contract language when deciding cases.

A federal appeals court has refused to enforcement of a Board decision finding an employer violated the Act when some union representatives were arrested for trespassing at a store in clear violation of the parties’ longstanding access agreements.  The court, calling the agency more of an “advocate than adjudicator” employed unusually strident language to criticize the Board’s decision.

In Fred Meyer Stores, Inc. v. NLRB, No. 15-1135 (D.C. Cir. August 1, 2017), the employer was faced with a situation that is all too common in labor relations,–a change in leadership at the local union representative level which brought with it more confrontational tactics, as well as a clear disregard of the parties’ agreement.

Background

The employer operates big box retail stores selling groceries and other items.  The employees of the employer have been represented by the union for over twenty years.  In connection with this relationship the parties had negotiated a detailed access provision in the collective bargaining agreement that expressly stated that when the union visits it “shall first contact the store manager” to notify the employer of the visit, and any contact between union representatives and employees should “not interfere with service nor unreasonably interrupt employees with the performance of their duties.”  The parties also had a written memorandum governing visits to the store, which is nothing if not emphatic:

Business agents have the right to talk BRIEFLY with employees on the floor, to tell those employees they are in the store, to introduce themselves, and to conduct BRIEF conversations as long as the employees are not unreasonably interrupted.  Such conversations should not occur in the presence of customers.

Business Representatives have the right to distribute fliers to employees on the floor AS LONG AS IT IS DONE QUICKLY. THE EMPLOYEES ARE NOT URGED TO STOP WHAT THEY ARE DOING TO READ THE MATERIALS AT THAT TIME AND FURTHER, THAT THE MATERIALS ARE NOT PASSED OUT IN THE PRESENCE OF CUSTOMERS.

Business agents have the right to distribute materials in the break room.  Lengthy conversations and discussions should always take place in the break room.

The parties agreed that the term “briefly” meant no longer than two minutes.  The practice of the parties up to the point of the case was that such visits were limited to two union representatives.

“But then things changed.”

When bargaining for a successor agreement began in 2008 the leadership of the union changed.  The new union president called in “reinforcements” from the International to “energize” the union’s efforts.  This resulted in groups of union representatives visiting the stores, not the agreed upon two.  As the union disregarded the access provisions the visits resulted in confrontations.  The employer developed a protocol to handle the confrontations which included reminding the union of the access policy, and in cases where there were violations of the access policy, asking the representatives to leave the store. If the representatives would not leave the police would be called.

We have a right “under Federal law”

In the showdown that would result in the charges, eight union representatives entered a store.  A dispute about access occurred with the employer asserting the visit had to be limited in accordance with the parties’ agreement.  One union representative asserted she had a right under “federal law” to “talk to employees as long as [she] wanted.”  The conversation grew more heated and the union representatives refused to talk about the access policy, bluntly stating “you do what you have to do and I’ll do what I have to do.”

The store manager was on the phone with loss prevention when a union representative got in his face and repeatedly called him a liar.  The store manager called the union representatives “jerks” and stated that unions were “outdated” and that paying union dues was “ridiculous.”  The police were called.  When the police told the union representatives to depart the store or face arrest, one union representative refused and was arrested.  The other representatives left the store.  Thereafter, one of the representatives tried to talk to the police about his “federal rights” and was informed by a police officer “another word and you’re done.”  Another word was uttered and that union representative was arrested.  Charges were filed with the Board over the arrests and the manager’s remarks.

NLRB Finds Violation

Against this backdrop, the NLRB found that the employer violated the Act “by limiting the agents’ right to contact store employees,” by “disparaging the union” and by threatening and causing the arrest of the union representatives.  The original Board decision was issued by a two member panel, which  was nullified by the Supreme Court.  The reconstituted Board reaffirmed its findings, but this time including a strong dissent by Board Member Johnson.  The employer appealed.

Court Refuses Enforcement, Has Harsh Words For NLRB

The Court began its analysis employers generally can prohibit labor organization activities by non-employee union representatives conducted on employer property.  Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992) (holding property rights generally prevail over the rights of non-employees when it comes to the NLRA).  Therefore “any right of the Union representatives to enter the Store . . must derive from the parties’ Access Agreement and past practice, not federal law.”  Under this legal authority, the “NLRB carries the burden to show the Union representatives were in compliance with the parties’ Access Agreement.”  The Court noted that under the facts in the record the union was in violation of the access agreement “the moment Union representatives walked through the doors to the Store without notifying management–at least 5 minutes before [the manager] first opened his mouth and long before anyone was arrested–they had become trespassers [the employer] could lawfully expel from the Store.”

The Court then examined the Board’s findings and its reasoning, and concluded that “the Board’s opinion is more disingenuous than dispositive; it evidences a complete failure to reasonably reflect upon the information contained in the record and grapple with contrary evidence–disregarding entirely the need for reasoned decisionmaking.”  Specifically, the Court noted:

  • “[M]ost egregiously, the Board stated the ALJ had found ‘the parties did not have a clearly defined practice with regard to the number of union agents permitted to be in a store at any one time.'” Yet, the ALJ expressly stated he made no such finding.  The Court found this to be “pernicious” and went on to state, “The Board’s tone deafness–even after the dissent drew attention to the error–is the antithesis of reasoned decisionmaking.”
  • The Board concluded the employer’s manager declined the union representative’s offer to read the parties’ access policy.  The Court noted that even the ALJ could not conclude what was said during the confrontation as the union representatives and the manager were engaged in an “intense debate” and the ALJ “declined to determine precisely what occurred. . .”  The Court characterized this finding as “the product of unmoored supposition rather than reasoned decisionmaking.”

The Court remanded the issue of whether the union representatives’ actions were protected noting, “the Board –purposefully or absentmindedly–misrepresented several of the ALJ’s findings and failed to respond to key points raised by the dissent.”

Having essentially concluded that the union was trespassing and that the Board’s findings to the contrary were unsupported (to say the very least), the Court turned its attention to the arrests.  Here the Court recited the NLRB case law that employers are liable when arrests occur when there is a persistent effort to maintain and enforce unlawful policies and “thwart the protected organizational activities of the employees.”  The Court noted the Board adopted the ALJ’s finding that the “causation [was] linear” in that the manager summoned the police and arrests occurred.  The Court rejected this analysis as ignoring the Board’s own precedent and concluded that the “intervening illegal acts” of the union representatives broke the chain of causation.  Thus, the union representatives essentially failed to follow the officers’ directives and were arrested, not because the manager called the police.  Had the union representatives left the store when the police asked no one would have been arrested.  The Court stated the Board’s analysis amounted to the creation of a duty by the manager to prevent the arrests, which was unsupported by the law.

Finally, the Court noted the manager’s statements did not unlawfully disparage the union.  Here the Court cited the very language in its Board case law used to justify employee remarks:  “the Act countenances a significant degree of vituperative speech in the heat of labor relations.”  Under the circumstances, the remarks of the manager were directed at the representatives not employees and were uttered in the heat of the moment.  The Court concluded no violation occurred.

Takeaways

Once again, a Court has refused to enforce a Board order as unreasonable.  This case demonstrates the importance of having clear access language in a collective bargaining agreement.  While we have seen cases where the Board appears to ignore or minimize contract language it is still best to be as explicit as possible because courts like to see it. And, the Board itself is in transition and the law likely will change substantially.

The employer avoided liability in this case by being able to point to a clear written agreement to demonstrate that it was the union, not the employer, that was in the wrong.  Having clear access language also is invaluable in cases like this where union leadership changes and suddenly wants to become more “energized” in its dealings with the employer.

Employers always need to be careful about calling the police in response to protests.  Calling the police should be the last resort and only when all other options have been exhausted.  Even then, a manager should not press for arrest unless circumstances exist warranting it (like a clear disruption to business).  Employers also need to be careful about summoning the police for trespass and should review state law.  In some states, like California, this case might have turned out differently because state law grants access to union representatives to property that is otherwise open to the public.

 

Two Employees, Social Media, An Unlawful Policy. . .What Could Possibly Go Wrong?

The advent of social media resulted in a feverish effort by the NLRB to keep up with new technology.  In reality, the legal standard for evaluating whether conduct is protected concerted activity did not change.  Rather, all the excitement was over the fact employees were being punished for things they said on social media, which was surprising only because some people seemed to not realize that what is said online is just as good, or bad, as something you say in person. It appears many people still do not realize that what they write online can have real consequences. Those consequences were the subject of a recent NLRB case.

In Butler Medical Transport, LLC, 365 NLRB No. 117 (July 27, 2017) the NLRB evaluated two separate terminations of employees for comments made on Facebook.  The employer provided ambulance transportation services and its employees consisted of emergency medical technicians who drove ambulances.

The Social Media Policy

The employer maintained a social media policy which stated, in part, “I will refrain from using social media sights [sic] which could discredit Butler Medical Transport or damages [sic] its image.”  It is undisputed that this policy is overbroad and therefore unlawful under the NLRA.

Employee 1 – “You could go to the labor board too”

An employee who had been terminated by the employer posted remarks on Facebook about her termination.  The employee essentially complained that the circumstances of her termination were unfair because the employer had sided with a patient in a dispute.  A few employees commented.  Employee 1 posted the following comment:  “Sorry to hear that but if you want you may think about getting a lawyer and taking them to court.”  Employee 1 followed up with the remark, “[Y]ou could contact the labor board too.”

An anonymous employee took a screenshot to this exchange and placed it on the Human Resource Manager’s desk.  Employee 1 was terminated for violating the social media policy.  He filed charges.

Employee 2 – “Hey everybody!!!!!

Employee 2 posted the following message on Facebook:  “Hey everybody!!!!! IM (sic) F*&KIN BROKE DOWN IN THE SAME SHIT I WAS BROKE IN LAST WEEK BECAUSE THEY DON’T WANTA BUY NEW SH#T!!!! CHA CHINNNGGGGGG–at Sheetz Convenience Store.”

As with Employee 1’s case, an anonymous source pushed a screenshot of this post underneath the Human Resource Manager’s door.  Employee 2 was terminated for violation of the social media policy.  He too filed charges with the NLRB.

The Board Decides Employee 1’s Termination Was Unlawful And Employee 2’s Termination Was Lawful

The Board found that Employee 1’s termination was unlawful in violation of Section 8(a)(1).  The Board found that Employee 1’s conduct was concerted activity because he “was engaged in a conversation with fellow employee’s regarding” the termination of an EMT and Employee 1 “advised [the terminated employee] about potential avenues of redress.”  The Board cited authority holding that giving such advice has been deemed to constitute protected activity.

The Board also found the purpose of Employee 1’s action satisfied the requirement that it be for “mutual aid and protection” because he “posted his comments as part of an online conversation with fellow employees, triggered by one employee’s complaint about what she believed was her unjust discharge–a potential concern for all employees, who have a common interest in job security and protection against such a dismissal.”  The Board found the termination for engaging in this activity a violation of Section 8(a)(1).

The Board addressed the alternate theory not addressed by the Administrative Law Judge that Employee 1’s discharge was unlawful because he was terminated pursuant to an overbroad policy.  As we have discussed many times, including here, it is a rare case where an employee is actually terminated or disciplined pursuant to an unlawful policy.  The Board applied Continental Group, Inc., 357 NLRB 409 (2011) which holds that an unlawfully overbroad rule may violate Section 8(a)(1) in two situations:  if the employee was disciplined for engaging either in protected activity or, for conduct that is not concerted, but “touches the concerns animating Section 7.”  The Board noted the employer can avoid liability by demonstrating that the employee’s conduct actually interfered with the employer’s operations and “that the interference, rather than the overbroad rule, was the reason for the discipline.”  The Board found that under either prong Employee 1’s discharge would be unlawful and that there was no evidence his activity interfered with operations.

The Board found Employee 2’s conduct was not protected.  Employee 2 did not testify for the General Counsel.  The employer subpoenaed him to testify and he refused citing his “fifth amendment rights” so the Judge and the Board did not have the benefit of hearing from Employee 2.  The evidence did disclose that Employee 2 explained the meaning of his Facebook post during his unemployment hearing and said he was driving his girlfriend’s car, not an ambulance.  If this was true, then the Board found the comment to be not protected at all because the mechanical efficiency of a girlfriend’s car is not a concern to other employees.  The employer also introduced service records showing that the ambulance driven by Employee 2 had never had repair problems.  If Employee 2 was driving an ambulance the day he posted his comments about it breaking down, the Board found this to be “maliciously false” and therefore not protected.  We have discussed this past standard recently in a case where a court of appeals criticized it as too exacting.

The Board also applied Continental Group to conclude that Employee 2’s termination was not unlawful under the overbroad policy because it was neither protected nor did it touch upon Section 7 activity.

Dissent Would Find Both Terminations Lawful

Chariman Miscimarra concurred in part (he agreed that Employee 2’s termination was lawful) but largely dissented arguing that the majority’s analysis of both Employee 1’s conduct and the application of Continental Group was in error.  The entire decision in this case, including Board, dissent and Administrative Law Judge’s opinion is 29 pages.  Chairman Miscimarra’s dissent weighs in at a healthy 15 pages and contains a good recitation of the law concerning protected concerted activity and the analysis of discipline taken pursuant to an unlawful policy.  To sum it up, the Chairman believed the analysis under Continental Group is contrary to the Act in that it was possible that an employee who was discharged for cause could be reinstated in violation of Section 10(c) of the Act which prohibits the Board from reinstating or paying backpay to an employee whose conduct otherwise constituted good cause.

Takeaways

This case is yet another reminder for employers to have all written policies reviewed for lawfulness under the Act.  Reviewing a policy for correct grammar and spelling also would not hurt.  It is almost certain the Board will change the standard in the coming months but scrutiny of policies will continue in some form.

The case also presents two fact patterns side by side which demonstrate good cause and bad cause to terminate an employee.  While there certainly is room to argue over whether Employee 1 was really acting in a concerted fashion when he offered unsolicited advice to the terminated employee to take her case to the “labor board,” such a conversation, even conducted virtually, must be seen as a high risk termination.  Employees have these kinds of conversations all the time.  When the conversation actually references the “labor board” it is hard to imagine the agency not taking issue with a termination suggesting that a case be brought to it.

The case also is another reminder to all who use social media:  we are all one step away from having a screenshot of our internet musings shoved under the door of Human Resources.

Employer’s Asking Employee “How Things Are Going?,” Prelude to Unlawful Solicitation of Grievances, Board Majority Rules

We are on the verge of the Board majority changing for the first time in approximately a decade. The President’s two appointees, if confirmed, will bring the Board up to a full five members.  After the new members are seated we likely will see big changes to the law.  In the meantime, the Board continues to issue decisions although it seems to have slowed down a bit in recent weeks.

Many of the Board decisions have to do with statements made by employers to employees which can be considered coercive.  In the last several years, the Board has carried its scrutiny  of employer statements to the extreme as it has evaluated written handbooks, often finding violations of various passages despite the lack of evidence that the policy was ever enforced or even that the employee was aware of it.  As we previously noted, it is highly likely the Board’s current standard for evaluating written policies will change in the coming months.

In Mek Arden, LLC dba Arden Post Acute Rehab, 365 NLRB No. 110 (July 25, 2017) the Board evaluated the interesting allegation of unlawful conduct known as “solicitation of grievances.”  Solicitation of grievances is one of the lesser known violations of the Act, and stands for the proposition that an employer violates the Act if, during union organizing, a supervisor attempts to find out what is driving the organizing and then, implicitly or explicitly, promises to remedy the problems.

Background

The employer ran a long-term care and rehabilitation facility in Sacramento, California.  The Certified Nursing Assistants (CNAs) working at the facility were the subject of an organizing drive which resulted in the union losing the representation election.  The union filed charges and asserted objections to the election.

“How are things going?”

Of the many allegations contained in the complaint, the one of most interest was the solicitation of grievances.  In mid-June of 2015 a CNA complained to an administrator about the new director of nursing.  The administrator relayed the complaints to the employer’s Chief Operations Officer (COO).  During a visit to the facility, the COO spoke to employees often asking them “how things are going?”  This question was asked of all employees encountered by the COO whether or not they were part of the employee group organizing.  The COO sought out the CNA who complained about the director of nursing because he had been told about the complaint.  The CNA was asked how things were going.  The CNA responded about some complaints in the workplace.  The COO then specifically asked about the director of nursing.  The CNA repeated her previous complaint and the COO stated he would “follow up and look into her concerns.”  Later that day, the employees, led by the CNA, presented the union’s election petition to facility management.

The union alleged the COO’s conversation with the CNA was an unlawful solicitation of grievances. The NLRB Region issued complaint on this claim and others.

Administrative Law Judge Dismisses Claim

The Administrative Law Judge evaluated the statement and noted that the COO asking the CNA how things were going was something that the COO “routinely” asked employees and that, under the circumstances, it was not unlawful because:

I find [the COO’s] reaction (to [the CNA’s] complaint) was a natural human response–with the alternative being to remain in an unnatural and bizarre stone silence in the face of such personally-conveyed complaint.  To rule otherwise in these circumstances would raise the specter of employees easily baiting or goading employers into committing automatic, ready-made unfair labor practices by raising unsolicited complaints and then claiming that the employers impliedly promised to resolve their grievances when they respond by stating they would ‘look’ into them.  Such is not the intent or purpose behind Section 8(a)(1) of the Act, which is to proscribe truly coercive conduct.

The General Counsel appealed this finding.

Board Majority – It’s Solicitation

In analyzing this allegation the Board found the judge’s analysis to be “flawed in several respects.”  The Board quoted the standard for evaluating a solicitation of grievance allegation set forth in Maple Grove Health Care Center, 330 NLRB 775, 775 (2000):

Absent a previous practice of doing so. . .the solicitation of grievances during an organizational campaign accompanied by a promise, express or implied, to remedy such grievances violates the Act. . . [I]t is the promise, express or implied, to remedy the grievance that constitutes the essence of the violation.  . . [T]he solicitation of grievances in the midst of a union campaign inherently constitutes an implied promise to remedy the grievances.  .  . [T]he inference that an employer is going to remedy the same when it solicits grievances in a preelection setting is a rebuttable one.

The Board noted that if the solicitation is made the employer can rebut the inference by establishing that it had a “past practice” of soliciting grievances in a like manner prior to the critical period.  The critical period is the period between the petition and election.

The Board found that the COO’s actions constituted solicitation because he sought out the CNA, and that after hearing her complaints told her he would follow up and look into her concerns.  The Board found it significant that there was no evidence the COO had visited the facility and asked employees “how are things going” prior to his visit.

Chairman Dissents

Chairman Miscimarra dissented, noting that the employee previously, and in an unsolicited manner, raised the complaint against the director of nursing.  Thus, it was hardly something that could be “solicited.”   Miscimarra agreed with the Judge’s analysis, finding the question “how are things going?” was not solicitation but “a familiar, commonplace greeting.”  Even if the question could be deemed a solicitation, Miscimarra concluded that the COO’s response that he would look into the complaint was a “natural human response” and not an implied promise to remedy a problem thereby conveying that unionization was unnecessary.

Takeaways

This is another example of an incremental expansion of the law.   The Board seems to be saying that even though the employee raised the issue voluntarily in a previous conversation that it would be unlawful to go talk to the employee about the complaint.  It is a natural, and good, business practice to relay complaints of employees to those in management who have the authority to address the issues.

The CNA clearly was not shy and had raised her complaints on her own to administrators.   It’s difficult to see the coercion.  It is especially hard to understand how this could be coercive when the CNA led the effort to publicly present the union’s petition to represent the employees shortly after her conversation with the COO.  If the conversation was so problematic it certainly did nothing to deter the CNA and her efforts to bring in the union.  Of course, the Board looks at employer statements objectively and does not consider whether the statement had its intended effect, which makes a certain amount of sense.  However, this practice tends to isolate the statements as if they occurred in a vacuum and it can lead to situations like this where the statement demonstrably did not deter the employee yet is still deemed “coercive.”  Indeed, as the Administrative Law Judge predicted, a non-coercive conversation is something that could be held onto and used to force a new election if the union did not prevail.  We have seen before how the Board does not hesitate to overturn election losses  based on little evidence of actual coercion.

This kind of thing can be avoided entirely, of course, by the establishment of well-defined programs to find out what is on employee’s minds, and to make a commitment to look into any problems.  That way, if and when organizing occurs, the employer can easily rebut a claim of solicitation of grievances.

It is not always natural for managers to ask “how are things going?” but it should  be.

Attack Falsely Alleging Sandwich Maker Engaged In Unhealthy Practices Not Protected Activity Concludes Appeals Court, Overruling NLRB

Labor disputes are passionate affairs.  Workplace grievances elicit all sorts of strident behavior. When the dispute involves a group of employees, the effect can become magnified.  The exact point at which the stridency of an employee’s behavior becomes unprotected is not always apparent, and like so much else in labor relations, the line changes with the Board’s make-up.  Sometimes the employee’s actions are clearly unprotected as we saw in the recent cases involving the errant human resources representative and in the case of the excitable nurse.  Many times the activity is clearly protected even when it is insulting or profane.  Moreover, the Board is given a high degree of deference by the reviewing courts and it is unusual to see a Board order reversed.

Recently, however, the United States Court of Appeals for the Eighth Circuit denied enforcement of a Board order concerning, among other things, the discharge of employees engaged in a labor dispute with their sandwich maker employer.  Concluding that “the means the disciplined employees used in their . . . attack were so disloyal as to exceed their right to engage in concerted protected activities,” the Court refused to enforce the Board’s order of reinstatement and backpay.  Miklin Enterprises, Inc. DBA Jimmy John’s v. NLRB, No. 14-3099 (8th Cir. July 3, 2017)

It All Started With An Organizing Drive

Employees working at ten Minneapolis area sandwich stores began an organizing drive sponsored by the International Workers of the World (“IWW”).  For those students of labor relations, the IWW has an interesting and colorful history.  An election was held and the union lost.  Objections were filed.  The employer and the IWW settled the case in a manner which would allow for a rerun election within 18 months if the union desired.

A major focus of the organizing was the lack of paid sick days.  The employer had a policy in place which required employees to find their own replacement if they were going to be sick or be subject to termination.

Union Attacks During Flu Season

Sensing an opportunity to highlight the push for paid sick time, the IWW and its supporters used the onset of flu season to pressure the employer.  In late January 2011 the union began  an attack on the employer by creating a poster which contained two identical images of a sandwich.  Above the first image were the words, “YOUR SANDWICH MADE BY A HEALTHY JIMMY JOHN’S WORKER.”  Above the second image, “YOUR SANDWICH MADE BY A SICK JIMMY JOHN’S WORKER.”  At the bottom of the poster contained the text:  “CAN’T TELL THE DIFFERENCE?  THAT’S TOO BAD BECAUSE JIMMY JOHN’S WORKERS DON’T GET PAID SICK DAYS.  SHOOT, WE CAN’T EVEN CALL IN SICK.  WE HOPE YOUR IMMUNE SYSTEM IS READY BECAUSE YOU’RE ABOUT TO TAKE THE SANDWICH TEST.”  [A copy of the actual flyer is attached to the last page of the decision]

The union distributed the poster, a press release and a letter to more than one hundred media contacts, including local newspapers and national news outlets.

The press release stated, “As flu season continues the sandwich makers at this 10-store franchise are sick and tired of putting their health and the health of their customers at risk.”  The press release threatened that if the owners did not meet with IWW supporters about their demands for paid sick leave the supporters would take “dramatic action” by “plastering the city with thousands of Sick Day posters.”

The letter that accompanied the press release contained similar language threatening to put the poster all over the city.  The letter also stated, “By working sick, we are jeopardizing the entirety of [the company’s] image and risking public safety.”

The owner of the franchise met with the IWW supporters and stated the attendance policy was being revised.  The IWW warned that if its demands were not met within ten days the posters would be displayed throughout the area.  The employer revised the attendance policy, which apparently wasn’t good enough for the IWW supporters who then implemented their threat to plaster the city with the posters.

The employer fired six employees who engaged in the attack and issued warnings to three others who assisted.  The attack continued after the discharges with the IWW issuing another press release asserting “It just isn’t safe–customers are getting their sandwiches made by people with the flu and they have no idea. . .” and the “unfettered greed of [the owner]. . .jeopardizes the health of thousands of customers and workesrs almost every day.”

The employer had been cited by the health department only twice, years prior to the dispute, for unrelated issues.

NLRB Decides Employee Actions Protected

A two member majority of the Board concluded “that neither the posters nor the press release were shown to be so disloyal, reckless or maliciously untrue to lose the Act’s protection.”  Noting that the Board has developed “considerably” its approach to evaluation of employee disloyalty, the Board held that “an employee’s public criticism of an employer must evidence a malicious motive” in order to lose the Act’s protection.  One member of the Board dissented.

Full Appeals Court Overrules Board

A divided panel of the Court originally enforced the Board’s order.  The employer appealed to the full court and a ten judge panel heard the case voting 8 to 2 to overrule the Board.

The Court acknowledged that employees have a protected right to communicate with third parties about their dispute.  The Court noted that this protection was limited by Section 10(c) of the Act which states, “No order of the Board shall require the reinstatement of any individual as an employee . . .if such individual or employee was discharged for cause.”  29 U.S.C. § 160(c).

The Court then evaluated the Supreme Court’s decision in NLRB v. Local Union No. 1229, IBEW, 346 U.S. 464 (1953) (known in the labor world as “Jefferson Standard” after the employer).  In Jefferson Standard, the Supreme Court upheld the Board’s decision that the firing of technicians at a television station was lawful because their actions were unprotected.  When bargaining with the union had failed the technicians distributed handbills criticizing the quality and poor programming.  The Board found the actions unprotected because “the gist” of the actions “was that the employer ought to be boycotted because he offered a shoddy product” not because the employer was “unfair” to the employees.”  94 NLRB 1507, 1511.  The Supreme Court, upholding the Board’s ruling these actions were unprotected, decided the case on broader grounds noting that there “is no more elemental cause for discharge of an employee than disloyalty to his employer.”

The Court next evaluated the Board law construing Jefferson Standard.  The Court noted that, “while always purporting to apply Jefferson Standard’s holding, the Board has migrated to a severely constrained interpretation of that decision” which requires that there must exist “evidence of a malicious motive.”  The Court ruled this interpretation “fundamentally misconstrued” Jefferson Standard.  First, “[b]y holding that no act of employee disparagement is unprotected disloyalty unless it is ‘maliciously motivated to harm the employer,’ the Board has not interpreted Jefferson Standard — it has overruled it.”  Second, the Board “refuses to treat as ‘disloyal’ any public communication intended to advance employees’ aims in a labor dispute, regardless of the manner in which, and the extent to which, it harms the employer.”

The Court concluded the Board’s test was an error of law because it effectively removed from the inquiry the central Section 10(c) limitation as defined by the Supreme Court — “whether the means used reflect indefensible employee disloyalty.”  Rather, the correct inquiry is “whether the communication reasonably targeted the employer’s labor practices, or indefensibly disparaged the quality of the employer’s product or services.”

Conclusion and Takeaways

The NLRB rarely cares what an appellate court says and usually just limits a court’s holding as “law of the case.”  However, as we are on the eve of a new Board (the two appointees are set for confirmation later this week), this case might be fodder for a change in the standard requiring “evidence of malicious intent” which is so high as to be nearly impossible to reach.

This case is useful regardless.  It is a good reminder of how standards change with the Board over time, where disparagement of television programming in the 1950’s can be unprotected but a despicable attack on the employer’s public health policies in 2011 is not.  The decision provides an excellent analysis of the interplay between the Act, the Board and the Supreme Court.  It also collects and analyzes the Board’s rulings in this area of the law and can be a good resource and citation.

 

Novel Theory Related To Violation Of Bargaining “Ground Rules” Fails (Fortunately)

When an employer and a union sit down to bargain they often agree to ground rules for how negotiations are to be conducted.  A common ground rule, for example, is for the parties to agree to address “non-economic” items before addressing economic proposals.  Other ground rules include things like confidentiality of negotiations (becoming increasingly rare as unions want to take their case to the public), who at the table has authority to bind the parties, and whether the contract must be ratified by the employees or the International union before becoming effective. Ground rules establish structure to the process.

Can a breach of the ground rules be an independent violation of the duty to bargain?  Recently, the NLRB attempted to prove that an employer’s alleged breach of a ground rule constituted an unfair labor practice.  Fortunately, this effort was rejected.  Anyone who has been at a bargaining table understands that, with minor exceptions, everything in bargaining must remain fluid,–including adherence to the rules.  Parties need to remain flexible in order to reach agreement, which means, of course, that sometimes one has to stretch, if not, deviate from the rules.

In Southcoast Hospitals Group, Inc., 365 NLRB No. 100 (June 28, 2017), the Board was confronted with a contentious round of bargaining that ultimately ended up with the employer declaring impasse and implementing its final offer.  A unanimous Board agreed that the impasse did not exist and the employer’s implementation was unlawful.

What is interesting about the case, however, is the government’s assertion of the allegation concerning the breach of a bargaining ground rule, and the Administrative Law Judge’s analysis concluding no such violation occurred.

Background:  The Prior Collective Bargaining Agreement

The collective bargaining agreement covered nurses working at a hospital.  The agreement provided for step wage increases.  Thus, there was an entry pay level for a nurse which was increased every few months through pay steps as the nurse continued working.  Step increases are distinguished from across-the-board pay increases, which are usually a percentage increase added to the base pay rates one time per year.

The Parties Agree To Put All Proposals On The Table By A Date Certain

At the beginning of negotiations, the employer and the union established some ground rules.  One such ground rule stated:

Neither party will submit new proposals, as opposed to counterproposals, after the fourth meeting, December 17, 2014.  All proposals must be reduced to writing.  For purposes of this ground rule, the first meeting is the meeting held on November 25, 2014.

This kind of rule is sometimes deemed necessary to get all of the issues that are important to the parties out on the table by a date certain so the parties understand the entire universe of issues under consideration.  It also helps to ensure that there are no surprises which could change the calculus of reaching an agreement.

Financial Issues Are The Main Focus Of Bargaining

The parties began bargaining.  A major stumbling block to reaching an agreement was the financial issues.  The employer, citing hard economic times, resisted increasing the financial cost of the contract.  For its part, the union sought additional wages and benefits including, across-the-board wage increases for each year of the contract.  The employer  was “unwavering” in its response that there would be no such wage increases.  The employer continually rejected wage proposals.  Because the employer did not want to increase pay it made no financial proposals.

The Employer’s Package Proposal

After several bargaining sessions spanning over five months, and well after the deadline in the ground rules for making new proposals, the employer made a proposal which contained 12 numbered paragraphs.  The document included signature lines for the parties at the bottom.  Paragraph 11 stated there would be no step increases for a one year period.  According to the union representative, this proposal number 11 caught the union by surprise because the union “was the only one who had put in financial proposals and none of them dealt with step raises.”

Negotiations Break Down -Charges Filed

The parties could not reach an agreement and the employer declared impasse. Ultimately, the employer implemented its proposal.  The employer’s conduct at the table was the subject of many allegations.

NLRB Alleges The Employer’s Proposal To Freeze Step Violated The Act Because It Was A Breach Of The Parties’ Ground Rules

As part of its complaint over the bargaining, the NLRB General Counsel asserted the introduction of the “step freeze” proposal independently violated the Act because it violated the parties’ ground rules.

The Administrative Law Judge disagreed.  The ALJ noted that failure to “adhere to agreed-to ground rules in negotiations may serve as an indicia of unlawful bad-faith bargaining.”  Harow Servo Controls, 250 NLRB 958, 959 (1980).  The ALJ stated that the NLRB “considers the overall circumstances” of the bargaining because the “Board is committed to ‘providing parties with the flexibility to enter into and deviate from new bargaining formats without the risk of being found to have violated their obligation to bargain in good faith’ because this ‘facilitates effective bargaining and encourages productive experimentation.'”  Detroit Newspapers, 326 NLRB 700, 704, fn.11 (1998).

The employer argued that the proposal to freeze the steps was a counterproposal, which was exempt from the ground rules.  The employer also argued that the proposal was not “new” in that it had been orally proposed across the table during one of the bargaining sessions (even though the same ground rule provided proposals had to be in writing).  The General Counsel and union argued that it the employer’s proposal could not be a “counterproposal” because the union’s proposal was for across the board wage increases while the employer’s proposal addressed step increases.

The ALJ brushed aside all these arguments noting they were “somewhat beside the point” and instead zeroed in on the real mechanics of bargaining:

Even if the General Counsel and Union believe that the [employer’s] contentions carry a whiff of the disingenuousness, it is at least colorable to say that the proposal to freeze step pay was offered as a ‘counterproposal’–in response–to the Union’s across-the-wage hourly wage proposal. . .There is no precise definition of the term.  All one can say that [is] with enough inspiration, nearly any proposal made after an earlier one can be termed a counterproposal.

The ALJ then dismissed the allegation.

Board Punts Issue

The General Counsel and union appealed the dismissal.  The Board did not address the allegation noting that any remedy it would order would be “subsumed within the remedy for the unlawful implementation allegation.”

Summary

This allegation represents an attempt by the Board to increase its authority and oversight over parties and over bargaining.  Fortunately, the attempt was unsuccessful.  Had a violation been found, then negotiations for employers and unions would have become less imaginative and more burdensome.  The parties might be reluctant to enter into any ground rules for fear of having them cited against them later.  Or, perhaps worse, the ground rules would become more detailed and legalistic, which would only prolong getting to the real issues of bargaining.

The General Counsel seemed to be taking the position that a counter-proposal must match a proposal from the opposing party.  Thus, if the union’s proposal was about wage increases, then any counter must also be about wage increases and not step increases.  Were the government to prevail on such a notion, then it would require parties to act in a manner that is too rigid.   In labor negotiations, a party making a counter-proposal may not be willing to move at all on the issue that is the subject of the main proposal but will counter with something different to show its willingness to move in another area as a sign of its intent to reach an agreement.

The case is interesting because it caused the ALJ in his analysis to articulate the realities of bargaining.  It was clear the ALJ did not believe the employer’s rationale but was unwilling to call the proposal a violation of the law, let alone a breach of the ground rules.  The ALJ’s analysis provides a good basis for understanding the interplay between ground rules and actual bargaining.  Parties that agree to ground rules almost always use them to advance their position.  Thus, the “inspiration” noted by the ALJ is what drives negotiation, and what makes it an inherently fascinating process.  Thus, for example, parties often cast non-economic proposals as economic based on an imaginative description because doing so helps move the pieces around to get an agreement.  Attempting to apply rigidity to the process through an allegation such as this would only dampen imagination, and might make reaching an agreement more difficult.

As the saying goes, sometimes rules are meant to be broken.  This seems to be such a case.

Case Demonstrates Perils Of Refusing To Discuss Issues With Union

A significant change in NLRB precedent during the last few years was the added requirement that an employer bargain over discretionary aspects of discipline in the period between the union acquiring representational rights and the first contract.  Given the limited set of circumstances one doesn’t see a whole lot of these cases.  A recent NLRB case, however, demonstrates how problems can arise by a failure to discuss discipline/discharge with the union at any stage.  In a broader context, the case shows why,– if there is some chance an obligation to bargain exists, even a slim one,– that it is probably better to have the discussion with the union.

In Security Walls, Inc., 365 NLRB No. 99 (June 15, 2017), the employer, a security contractor, provided armed guards at an IRS facility in Austin, Texas.  When the employer took over the contract it started to bargain with the union but did reach agreement until 13 months later.

Pre-Collective Bargaining Agreement Disciplinary Policies

While the parties were bargaining, the employer posted at the workplace portions of its contract with the IRS that listed, among other behaviors, “neglect of duty” as grounds for “immediate removal” from the workplace.  Sometime after this posting, the employer posted a “Disciplinary Action/Policy Statement” which “supersedes all other policies on this subject.”  This latter document posted a progressive discipline system which listed specific violations and corresponding disciplinary actions.  As to breach of security, the conduct is treated as a third-level (2-day suspension) or fourth level (termination) of discipline based on previous offenses.”

Three Guards Are Suspended, Then Terminated

In two separate incidents, three guards became distracted and members of the public wandered past security into the IRS facility.  In response, the employer suspended the three, one of whom was the union president.  The union president responded with a written request for information about the suspensions, which included the following statement, “As Local Union President, I have some issues I needed [sic] to address regarding my and [the other guard’s] suspension.”

The IRS was notified of the incidents.  In an exchange of emails the IRS indicated that the guards “must be able to multi-task and recognize what is going on around them” but did not request the removal of the guards.

The guards filed a grievance protesting the actions and stating, “”The Union and the Company must work sincerely and wholeheartedly to the end, that the [policies] be applied and interpreted fairly and conscientiously, without discrimination, and to the best interest of efficient security operations of the client.”

A supervisor informed the guards that they were terminated.  However, the next day, the employer’s in-house counsel sent the union a letter stating that the guards were not terminated and that a “final decision” would be forthcoming.  The letter concluded:  “This is not an offer to bargain nor is it an offer to invoke the grievance procedure.”  The parties had tentatively reached agreement on a grievance procedure but had not yet completed negotiations.

The union emailed the employer demanding reinstatement and threatening to file NLRB charges if the demands were not met.  When the employer did not respond, the union filed charges.

Administrative Law Judge Finds Violation

The Administrative Law Judge ruled that the employer violated its obligation to bargain because it failed to bargain “on request” of the union and that the disciplinary policy was unilaterally changed because it called for suspension.

Board Majority Finds Employer Unilaterally Changed Its Disciplinary Policy and Unlawfully Refused To Bargain

On appeal a two person majority of the Board (Pearce and McFerran) affirmed the judge’s findings.  The Board found that the disciplinary policy warranted only a suspension, and that the employer’s departure from the policy constituted a unilateral change in a term or condition of employment.

The Board also found that the employer refused to bargain following the discharge of the guards.  The employer had asserted that the parties had tentatively reached a grievance procedure in negotiations, and therefore, the obligation to bargain was satisfied.  The Board rejected this defense based on the fact that the overall agreement had not been reached and that the employer’s response to the union rejected any notion that the matter was being treated pursuant to the grievance procedure.

The Board also addressed an issue raised by the Chairman Miscimarra in his dissent that the union had not demanded bargaining.  The Board majority rejected this assertion asserting that the “Board has never required a union to employ some combination of magic words to express a request to bargain.”  Thus, in this case, the union president’s statement that he had some “issues he needed to address” concerning his and another guard’s suspension was sufficient.  Further, the union’s statement in its grievance that the “Union and Company must work sincerely and wholeheartedly to the end…..” constituted a request to bargain.  Finally, the union’s threat to file an unfair labor practice charge, and the fact that it did, also added up to a demand to bargain.

The NLRB ordered reinstatement and backpay for the guards.

Dissent Takes Issue With Bargaining Violations

In his dissent Chairman Miscimarra asserted that there was no violation to the duty to bargain.  Miscimarra stated that there was no unilateral change in policy.  While the disciplinary policy said it superseded prior “policies” the employer’s contract with the IRS, which was posted and required immediate removal for neglect of duty, was not a policy but a contract binding on the employer.

Miscimarra also stated that the violation concerning post-discharge bargaining deprived the employer of due process because no such allegation was contained in the complaint.  Finally, Miscimarra noted that according to Board law a “Union’s objections, protests and threats to file a Board charge are not sufficient under Section 8(a)(5) to constitute a request for bargaining.”

Summary – Discussion Beats Litigation

This is one of those odd cases where the Board appears to be definitively interpreting a policy when it is clear no such interpretation can be applied.  Thus, the Board found a unilateral change had occurred because the policy clearly called for suspension.  However, it could be argued that the policy actually gave the employer discretion to decide which level to apply and that prior misconduct was a consideration for the employer, not that prior offenses must exist to impose discharge.

Whenever a termination case at the NLRB asserts that the violation is a failure to bargain the underlying conduct of the employee typically is not being challenged.  The vast majority of NLRB discharge cases involve an allegation of unlawful motivation,–the employer terminated the employee because of his or her protected activity; no such unlawful motivation was asserted here.  Here, there was no dispute that the guards did what was alleged:  they allowed members of the public to wander unchallenged into a secure IRS building.

When the discharge case involves only a refusal to bargain, then the government is saying the employer should have sat down and discussed the matter before taking any final action.  Under the contract with the IRS such conduct by the guards arguably warranted immediate removal; under the employer’s disciplinary policy the guards’ conduct arguably warranted a suspension or termination.  Had the employer sat down to discuss the matter with the union it may very well have deprived the union of any grounds for asserting the terminations were unlawful.  As we have seen in other contexts, an employer’s assertion that it had no obligation to bargain is risky.  The time and expense associated with bargaining (which could easily result in the terminations being validated) as opposed to undertaking litigation is something that should be considered before taking a position that there is no obligation to bargain.

Out With A Whimper: DOL Moves To Rescind Persuader Rules

As we reported last month, the DOL was considering what to do with the enjoined persuader rules, new regulations that would have drastically changed the interpretation of the advice exemption to the LMRDA reporting requirements.  In sum, the new rules effectively narrowed the advice exemption to require reporting of a number of activities that had clearly fell within the exemption for some 50 years.

Earlier this week, the Department of Labor published a notice of its intent to rescind the persuader rule:  Rescission of Rule Interpreting Advice Exemption, 82 Federal Register 26877 (June 12, 2017)  The notice states the proposed rescission is “part of the Department’s continuing effort to fairly effectuate the reporting requirements of the LMRDA.”

The reason given behind the rescission is that it “it would ensure that any future changes to the Department’s interpretation would reflect additional consideration of possible alternative interpretations. . .and could address the concerns that have been raised by the reviewing courts.”  As to this latter consideration, the rule change was enjoined by a federal court last year and never went into effect.

Comments on the proposed rescission are due on or before August 11, 2017.  This action by the Department of Labor isn’t terribly surprising given the change in administration and the opposition to the rule change.

Circuit Court Rejects Attack On NLRB’s New Witness Rule

During the last several years, the NLRB has overturned a great deal of existing precedent.  Among other changes, the Board has required bargaining over discipline in newly organized units, found graduate students to be employees entitled to organize, and found that two employers may have to bargain together.  The Board also changed the longstanding rule that witness statements do not have to be produced n in response to a union’s information request.  The witness statement case as originally reported was issued by a two person Board in 2012 and ultimately was overturned by the Supreme Court’s New Process Steel case.  The NLRB, never one to let go of a good change in precedent, simply reissued the decision in American Baptist Homes of the West, 362 NLRB No. 139 (2015).   Then Member Miscimarra dissented (which means this rule could be overturned in the coming months).

It Started With An Investigation

The employer started an investigation of a nursing assisting suspected of sleeping on the job.  The employer talked to three employees.  Two of the employees were reluctant to discuss what they saw and the employer assured them of confidentiality.  Those two employees gave statements.  A third employee, a charge nurse, gave a statement voluntarily as it was part of her duty to provide reports. The union representing the employees asked for all witness statements.  The employer refused, and in its letter rejecting the union’s request, it cited the existing case law, which provided a bright-line rule that the duty to provide information did “not encompass the duty to furnish witness statements themselves.”  Anheuser-Busch, Inc., 237 NLRB 982, 984-985 (1978).  The union filed charges which led to the rule change in the two subsequent Board decisions.

The Board Overrules Anheuser-Busch But Only Prospectively

In reiterating the new rule, the Board applied it prospectively.  In particular, the Board noted that the two employee statements obtained after assurance of confidentiality were “witness statements” that did not have to be disclosed.  The Board concluded the employer had expressly relied on the existing law even citing it in its letter to the union and it would not be fair to apply the new rule in these circumstances.  As to the third, voluntarily provided statement, the Board ruled that because it was part of the nurse’s job duties to provide statements it was not a “witness statement” and therefore, the employer’s failure to turn it over constituted a violation of Section 8(a)(5).  The employer appealed the case to the D.C. Circuit Court of Appeals.  The NLRB cross-petitioned for enforcement of its decision.

Court Rules Employer Lacks Standing To Challenge NLRB’s New Rule

In American Baptist Homes of the West v. NLRB, No. 15-1445 (D.C. Cir. June 6, 2017) the court upheld the NLRB’s decision. The court noted that the two witness statements that the Board did not require disclosed were not at issue, and only the third statement was subject to the appeal.  The employer argued that the Board had impermissibly departed from its longstanding witness statement case law.  The court disagreed, noting that “witness statements” as defined by Anheuser-Busch and its progeny stand for the proposition that an assurance of confidentiality “must have motivated the witness in order to bring the statement within the protection of Anheuser-Busch.”   In other words, the third employee’s statement did not qualify as a “witness statement” even under the old rules but was more of a business report.

The employer also challenged the new rule “notwithstanding that the [Board’s] decision will apply only in future cases.”  The court rejected this claim noting that “a party generally lacks standing to challenge adjudicatory rulings that have not been applied to it.”

Summary

The case serves to highlight one of the bigger changes to the law in the last few years.  By disposing of the bright-line rule that witness statements need not be disclosed in an information request the Board erased a major area of certainty in employer (and to a lesser extent, union) investigations.  Had the employer prevailed in court it likely would have made very little difference beyond the case in question, as the NLRB does not often pay much attention to court of appeals decisions.

Change to this rule likely will be addressed in the coming months as a new NLRB takes shape.

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